Use of Truncated Taxpayer Identification Numbers on Forms W-2, Wage and Tax Statement, Furnished to Employees, 43920-43925 [2017-19910]
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Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Proposed Rules
Board of Governors of the Federal
Reserve System proposes to amend part
228 of chapter II of title 12 of the Code
of Federal Regulations as follows:
PART 228—COMMUNITY
REINVESTMENT (REGULATION BB)
1. The authority citation for part 228
continues to read as follows:
■
Authority: 12 U.S.C. 321, 325, 1828(c),
1842, 1843, 1844, and 2901 et seq.
§ 228.12
[Amended]
2. Section 228.12 is amended:
a. By adding ‘‘or’’ at the end of
paragraph (g)(3);
■ b. By removing ‘‘; or’’ at the end of
(g)(4), and adding in its place ‘‘.’’;
■ c. By removing paragraph (g)(5);
■ d. In paragraph (h)(2)(i), by removing
the phrase ‘‘unless it is a multifamily
dwelling loan (as described in appendix
A to part 1003 of this title)’’ and adding
in its place the phrase ‘‘unless the loan
is for a multifamily dwelling (as defined
in § 1003.2(n) of this title)’’;
■ e. By removing paragraph (j)(3), and
redesignating paragraph (j)(4) as
paragraph (j)(3) and redesignating
paragraph (j)(5) as paragraph (j)(4); and
■ f. In paragraph (l), by removing the
phrase ‘‘ ‘home improvement loan,’
‘home purchase loan,’ or a ‘refinancing’
as defined in § 1003.2 of this title’’ and
adding in its place the phrase, ‘‘closedend mortgage loan or an open-end line
of credit as these terms are defined
under § 1003.2 of this title and that is
not an excluded transaction under
§ 1003.3(c)(1)–(10) and (13) of this title’’.
■
■
§ 228.22
[Amended]
3. Section 228.22 is amended in
paragraph (a)(1), by removing the phrase
‘‘home equity,’’ after ‘‘credit card.’’
■
§ 228.42
[Amended]
4. Section 228.42 is amended in
paragraph (c)(1), by removing the phrase
‘‘home equity,’’ after ‘‘credit card.’’
■ 5. Section 228.43 is amended by
revising paragraph (b)(2), to read as
follows:
■
§ 228.43
file.
Content and availability of public
sradovich on DSKBBY8HB2PROD with PROPOSALS
*
*
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(b) * * *
(2) Banks required to report Home
Mortgage Disclosure Act (HMDA) data.
A bank required to report home
mortgage loan data pursuant part 1003
of this title shall include in its public
file a written notice that the institution’s
HMDA Disclosure Statement may be
obtained on the Consumer Financial
Protection Bureau’s (Bureau’s) Web site
at www.consumerfinance.gov/hmda. In
addition, a bank that elected to have the
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Board consider the mortgage lending of
an affiliate shall include in its public
file the name of the affiliate and a
written notice that the affiliate’s HMDA
Disclosure Statement may be obtained at
the Bureau’s Web site. The bank shall
place the written notice(s) in the public
file within three business days after
receiving notification from the Federal
Financial Institutions Examination
Council of the availability of the
disclosure statement(s).
*
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Federal Deposit Insurance Corporation
12 CFR Chapter III
Authority and Issuance
For the reasons discussed in the
section, the
Board of Directors of the Federal
Deposit Insurance Corporation proposes
to amend part 345 of chapter III of title
12 of the Code of Federal Regulations to
read as follows:
SUPPLEMENTARY INFORMATION
PART 345—COMMUNITY
REINVESTMENT
1. The authority citation for part 345
continues to read as follows:
■
Authority: 12 U.S.C. 1814–1817, 1819–
1820, 1828, 1831u and 2901–2908, 3103–
3104, and 3108(a).
§ 345.12
[Amended]
2. Section 345.12 is amended:
■ a. By adding ‘‘or’’ at the end of
paragraph (g)(3);
■ b. By removing ‘‘; or’’ at the end of
(g)(4), and adding in its place ‘‘.’’;
■ c. By removing paragraph (g)(5);
■ d. In paragraph (h)(2)(i), by removing
the phrase ‘‘unless it is a multifamily
dwelling loan (as described in appendix
A to part 1003 of this title)’’ and adding
in its place the phrase ‘‘unless the loan
is for a multifamily dwelling (as defined
in § 1003.2(n) of this title)’’;
■ e. By removing paragraph (j)(3), and
redesignating paragraph (j)(4) as
paragraph (j)(3) and redesignating
paragraph (j)(5) as paragraph (j)(4); and
■ f. In paragraph (l), by removing the
phrase ‘‘‘home improvement loan,’
‘home purchase loan,’ or a ‘refinancing’
as defined in§ 1003.2 of this title’’ and
adding in its place the phrase, ‘‘closedend mortgage loan or an open-end line
of credit as these terms are defined
under § 1003.2 of this title and that is
not an excluded transaction under
§ 1003.3(c)(1)–(10) and (13) of this title’’.
■
§ 345.22
[Amended]
3. Section 345.22 is amended in
paragraph (a)(1), by removing the phrase
‘‘home equity,’’ after ‘‘credit card.’’
■
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§ 345.42
[Amended]
4. Section 345.42 is amended in
paragraph (c)(1), by removing the phrase
‘‘home equity,’’ after ‘‘credit card.’’
■ 5. Section 345.43 is amended by
revising paragraph (b)(2), to read as
follows:
■
§ 345.43
file.
Content and availability of public
*
*
*
*
*
(b) * * *
(2) Banks required to report Home
Mortgage Disclosure Act (HMDA) data.
A bank required to report home
mortgage loan data pursuant part 1003
of this title shall include in its public
file a written notice that the institution’s
HMDA Disclosure Statement may be
obtained on the Consumer Financial
Protection Bureau’s (Bureau’s) Web site
at www.consumerfinance.gov/hmda. In
addition, a bank that elected to have the
FDIC consider the mortgage lending of
an affiliate shall include in its public
file the name of the affiliate and a
written notice that the affiliate’s HMDA
Disclosure Statement may be obtained at
the Bureau’s Web site. The bank shall
place the written notice(s) in the public
file within three business days after
receiving notification from the Federal
Financial Institutions Examination
Council of the availability of the
disclosure statement(s).
*
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Dated: September 12, 2017.
Keith A. Noreika,
Acting Comptroller of the Currency.
By order of the Board of Governors of the
Federal Reserve System, September 6, 2017.
Ann E. Misback,
Secretary of the Board.
By order of the Board of Directors.
Dated at Washington, DC, this 31st day of
August, of 2017.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2017–19765 Filed 9–19–17; 8:45 am]
BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1, 31, and 301
[REG–105004–16]
RIN 1545–BN35
Use of Truncated Taxpayer
Identification Numbers on Forms W–2,
Wage and Tax Statement, Furnished to
Employees
Internal Revenue Service (IRS),
Treasury.
AGENCY:
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Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Proposed Rules
ACTION:
Notice of proposed rulemaking.
This document contains
proposed amendments to the
regulations under sections 6051 and
6052 of the Internal Revenue Code
(Code). To aid employers’ efforts to
protect employees from identity theft,
these proposed regulations would
amend existing regulations to permit
employers to voluntarily truncate
employees’ social security numbers
(SSNs) on copies of Forms W–2, Wage
and Tax Statement, that are furnished to
employees so that the truncated SSNs
appear in the form of IRS truncated
taxpayer identification numbers
(TTINs). These proposed regulations
also would amend the regulations under
section 6109 to clarify the application of
the truncation rules to Forms W–2 and
to add an example illustrating the
application of these rules. Additionally,
these proposed amendments would
delete obsolete provisions and update
cross references in the regulations under
sections 6051 and 6052. These proposed
regulations affect employers who are
required to furnish Forms W–2 and
employees who receive Forms W–2.
DATES: Written or electronic comments
and requests for a public hearing must
be received by December 18, 2017.
ADDRESSES: Send submissions to:
CC:PA:LPD:PR (REG–105004–16), Room
5203, Internal Revenue Service, P.O.
Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions
may be hand-delivered between the
hours of 8 a.m. and 4 p.m. to
CC:PA:LPD:PR (REG–105004–16),
Courier’s Desk, Internal Revenue
Service, 1111 Constitution Avenue NW.,
Washington, DC, or sent via the Federal
eRulemaking Portal at
www.regulations.gov (REG–105004–16).
FOR FURTHER INFORMATION CONTACT:
Concerning these proposed regulations,
Eliezer Mishory, (202) 317–6844;
concerning submissions of comments
and/or requests for a hearing, Regina
Johnson, (202) 317–6901 (not toll-free
numbers).
SUPPLEMENTARY INFORMATION:
sradovich on DSKBBY8HB2PROD with PROPOSALS
SUMMARY:
Background
This document contains proposed
amendments to the Income Tax
Regulations (26 CFR part 1), the
Employment Taxes and Collection of
Income Tax at Source Regulations (26
CFR part 31), and the Procedure and
Administration Regulations (26 CFR
part 301) regarding statements that are
required to be furnished to employees
by employers or other persons under
sections 6051 and 6052 of the Code.
Section 6051(a) generally requires that
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an employer provide to each employee
on or before January 31st of the
succeeding year a written statement that
shows the employee’s total amount of
wages and the total amount deducted
and withheld as tax from those wages,
along with other information, for each
calendar year. Employers must use
Form W–2 (or a substitute statement
that complies with applicable revenue
procedures relating to such statements)
to provide the information required by
section 6051(a) to employees. See
§ 31.6051–1(a)(1)(i); Rev. Proc. 2016–54,
2016–45 I.R.B. 685, also published as
Publication 1141, ‘‘General Rules and
Specifications for Substitute Forms W–
2 and W–3,’’ or any successor guidance.
Section 6051(d) provides that, when
required to do so by regulations,
employers must file with the Secretary
duplicates of the forms required to be
furnished to employees under section
6051. Section 31.6051–2(a) generally
requires employers to file Social
Security Administration copies of
Forms W–2 with the Social Security
Administration. A person making a
payment of third-party sick pay to an
employee of another employer (payee) is
required under section 6051(f)(1) to
furnish a written statement to the
employer for whom services are
normally rendered containing certain
information, including the payee’s SSN.
Under certain conditions, the employer
for whom services are normally
rendered is required under section
6051(f)(2) to furnish a Form W–2 to the
payee. This situation may arise, for
example, when an insurance company
is making payments to an employee of
another employer because the employee
is temporarily absent from work due to
injury, sickness or disability, and the
insurance company has satisfied the
necessary requirements under § 32.1(e)
of the Temporary Employment Tax
Regulations under the Act of December
29, 1981 (Pub. L. 97–123) to transfer the
obligation to do Form W–2 reporting to
the employer. Employers also must use
Form W–2 to file and furnish
information regarding payment of wages
in the form of group-term life insurance
under section 6052.
Section 6109(a) authorizes the
Secretary to prescribe regulations with
respect to the inclusion in returns,
statements, or other documents of an
identifying number as may be
prescribed for securing proper
identification of a person. On July 15,
2014, the Treasury Department and the
IRS published in the Federal Register
(79 FR 41127–02) final regulations (TD
9675) authorizing the use of TTINs on
certain payee statements and certain
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43921
other documents. These final
regulations were in response to
concerns about the risks of identity
theft, including its effect on tax
administration.
Section 301.6109–4(b) generally
provides that a TTIN may be used to
identify any person on any statement or
other document that the internal
revenue laws require to be furnished to
another person. Under § 301.6109–4(a),
a TTIN is an individual’s SSN, IRS
individual taxpayer identification
number (ITIN), IRS adoption taxpayer
identification number (ATIN), or IRS
employer identification number (EIN) in
which the first five digits of the ninedigit number are replaced with Xs or
asterisks. For example, a TTIN replacing
an SSN appears in the form XXX–XX–
1234 or ***–**–1234. Section
301.6109–4(b)(2)(ii) prohibits using
TTINs if, among other things, a statute,
regulation, other guidance published in
the Internal Revenue Bulletin, form, or
instructions specifically requires the use
of an SSN. Additionally, § 301.6109–
4(b)(2)(iii) prohibits the use of TTINs on
any return, statement, or other
document that is required to be filed
with or furnished to the IRS.
Prior to being amended by the
Protecting Americans from Tax Hikes
(PATH) Act of 2015, Public Law 114–
113, div. Q, title IV, 129 Stat. 2242,
section 6051(a)(2) specifically required
employers to include their employees’
SSNs on copies of Forms W–2 that are
furnished to employees. In addition,
current regulations under § 31.6051–1,
as well as forms and instructions,
require employers to include their
employees’ SSNs on copies of Forms
W–2 that are furnished to employees.
Section 409 of the PATH Act amended
section 6051(a)(2) by striking ‘‘his social
security account number’’ from the list
of information required on Form W–2
and inserting ‘‘an identifying number
for the employee’’ instead. This
statutory amendment is effective for
statements issued after December 18,
2015, the date that the PATH Act was
signed into law. Because an SSN is no
longer required by section 6051, the
Treasury Department and the IRS
propose amending the regulations to
permit employers to truncate
employees’ SSNs to appear in the form
of TTINs on copies of Forms W–2 that
are furnished to employees. If the
proposed regulations are finalized
without change, the IRS intends to
incorporate the revised regulations into
forms and instructions, permitting
employers to use a TTIN on the
employee copy of the Form W–2. See
§ 301.6109–4(b)(2)(i) and (ii).
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Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Proposed Rules
sradovich on DSKBBY8HB2PROD with PROPOSALS
Explanation of Provisions
Truncated SSN Permitted on
Employee’s Copies of Form W–2
These proposed regulations amend
§ 31.6051–1 to permit employers to
truncate employees’ SSNs to appear in
the form of a TTIN on copies of Forms
W–2 that are furnished to employees
under section 6051. Consistent with the
rule in § 301.6109–4(b)(2)(iii),
prohibiting the use of TTINs on any
return, statement, or other document
that is required to be filed with or
furnished to the IRS, these proposed
regulations amend § 31.6051–2 to clarify
that employers may not truncate an
employee’s SSN to appear in the form
of a TTIN on a copy of a Form W–2 that
is filed with the Social Security
Administration. This result is
appropriate because both the IRS and
the SSA need to utilize Forms W–2 to
properly identify individuals to be able
to carry out their respective duties.
Consistent with the rule in
§ 301.6109–4(b)(2)(ii) that prohibits
using TTINs if, among other things, a
statute specifically requires the use of
an SSN, the proposed regulations also
amend § 31.6051–3 to clarify that a
payee’s SSN may not be truncated to
appear in the form of a TTIN on a
statement furnished to the employer of
the payee who received sick pay from a
third party because section
6051(f)(1)(A)(i) specifically requires
such a statement to contain the
employee’s SSN. Nonetheless, these
proposed regulations permit employers
to truncate payees’ SSNs to appear in
the form of TTINs on copies of Forms
W–2 that are furnished under section
6051(f)(2) to payees that report such
third-party sick pay, in accordance with
the general rule governing the reporting
of wages to employees on Forms W–2
under section 6051(a), because section
6051(f)(2) does not specifically require
the use of an SSN.
Further, these proposed regulations
amend § 1.6052–2 to permit employers
to truncate employees’ SSNs to appear
in the form of TTINs on copies of Forms
W–2 that are furnished to employees
under section 6052(b) regarding
payment of wages in the form of groupterm life insurance.
These proposed regulations amend
§ 301.6109–4 to clarify that truncation is
not allowed on any return, statement, or
other document that is required to be
filed with or furnished to the Social
Security Administration under the
internal revenue laws. These proposed
regulations also clarify the rule
prohibiting truncation if a statute,
regulation, other guidance published in
the Internal Revenue Bulletin, form, or
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instructions, specifically requires use of
a SSN, ITIN, ATIN, or EIN. The
proposed regulations provide that
truncation is allowed if a statute or IRS
guidance (e.g., regulations, forms,
instructions), that specifically requires
use of a SSN, ITIN, ATIN, or EIN, also
specifically states that the taxpayer
identifying number may be truncated.
These proposed regulations also add an
example illustrating the application of
these rules to Forms W–2. These
proposed regulations also amend the
existing example for clarity.
Miscellaneous Updates to Regulations
Under Sections 6051 and 6052
In addition to the amendments
relating to the truncation of employees’
SSNs to appear in the form of TTINs in
specific circumstances, these proposed
regulations eliminate obsolete
provisions and update cross references
in the regulations under sections 6051
and 6052, as explained below.
First, these proposed regulations
amend § 31.6051–1 to remove obsolete
provisions regarding compensation, as
defined in the Railroad Retirement Tax
Act, paid during 1968, 1969, 1970, and
1971 and reported on the now obsolete
Form W–2 (RR); the special rule for
statements with respect to the
refundable earned income credit for
Form W–2 for 1987 and 1988; and
references to the annual contribution
base (repealed in 1993) for wages
subject to the Hospital Insurance tax
(commonly known as Medicare tax).
Second, these proposed regulations
amend § 31.6051–1 to remove obsolete
cross references, including a cross
reference to former § 301.6676–1
relating to the penalty for failure to
report an identification number or an
account number, and a cross reference
to section 6723 (prior to its amendment
in 1989) that was relevant for Forms W–
2 that were due from the beginning of
1987 through the end of 1989.
Third, these proposed regulations
amend § 31.6051–2 to update now
inaccurate cross references resulting
from statutory and regulatory changes
regarding penalties for failures to file,
and to remove a cross reference to
section 6723 (prior to its amendment in
1989) that was relevant for Forms W–2
that were due from the beginning of
1987 through the end of 1989. These
proposed regulations also change the
title of § 31.6051–2 from ‘‘Information
returns on Form W–3 and Internal
Revenue Service copies of Forms W–2’’
to ‘‘Information returns on Form W–3
and Social Security Administration
copies of Forms W–2,’’ to conform with
the text of the regulation that refers to
the Social Security Administration
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copies of Form W–2. In addition, these
proposed regulations remove obsolete
references in § 31.6051–2 to the
requirements to submit information on
magnetic tape and insert a reference to
the requirements to submit information
on magnetic media.
Fourth, these proposed regulations
amend § 31.6051–3 to remove the
obsolete transition rule for third-party
sick pay that was paid to a payee after
December 31, 1980, and before May 1,
1981.
Fifth, these proposed regulations
amend § 1.6052–2 to remove an obsolete
rule that allowed employers to use a
statement other than a Form W–2 to
satisfy the requirement to furnish a
statement to an employee with respect
to wages paid in the form of group-term
life insurance. This rule was relevant for
years prior to 1973, before § 1.6052–1
was amended to require employers to
report wages in the form of group-term
life insurance on Form W–2. At the
same time, to conform to this new
requirement, § 1.6052–2 was amended
to provide that the requirement to
furnish a statement to an employee with
respect to wages paid in the form of
group-term life insurance may be
satisfied by furnishing to the employee
the employee’s copy of Form W–2 that
was filed pursuant to § 1.6052–1.
Because the transition period to require
employers to file Form W–2 has long
since passed and because the Treasury
Department and the IRS understand that
copies of Forms W–2 are used to satisfy
the requirement to furnish statements to
employees under § 1.6052–2, these
proposed regulations require employers
to furnish to employees the employees’
copies of Forms W–2 that were filed
pursuant to § 1.6052–1, and these
proposed regulations make conforming
changes throughout that section.
Finally, these proposed regulations
update the now inaccurate cross
reference resulting from statutory
changes regarding penalties for failures
to furnish statements under section
6052 and remove the deemed
compliance rule, which applied only to
years before 1972.
Proposed Effective/Applicability Date
These proposed regulations will be
effective on the date of the publication
of the Treasury Decision adopting these
rules as final in the Federal Register.
These proposed regulations amend the
effective/applicability date provisions in
§ 31.6051–1, § 31.6051–3, and
§ 301.6109–4, and add applicability date
provisions to § 1.6052–2 and § 31.6051–
2. Several state tax administrators have
requested additional time to develop
systems to process the copies of Forms
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Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Proposed Rules
W–2 filed with state income tax returns
that may contain truncated SSNs. In
light of this request, these proposed
regulations will not apply to Forms W–
2 required to be furnished before
January 1, 2019. Accordingly, these
proposed regulations provide that these
regulations, as amended, will be
applicable for statements required to be
filed and furnished under sections 6051
and 6052 after December 31, 2018.
Statement of Availability of IRS
Documents
IRS Revenue Procedures, Revenue
Rulings notices, and other guidance
cited in this preamble are published in
the Internal Revenue Bulletin (or
Cumulative Bulletin) and are available
from the Superintendent of Documents,
U.S. Government Printing Office,
Washington, DC 20402, or by visiting
the IRS Web site at www.irs.gov.
sradovich on DSKBBY8HB2PROD with PROPOSALS
Special Analyses
Certain IRS regulations, including this
one, are exempt from the requirements
of Executive Order 12866, as
supplemented and reaffirmed by
Executive Order 13563. Therefore, a
regulatory assessment is not required.
Because these proposed regulations do
not impose a collection of information
on small entities, the Regulatory
Flexibility Act (5 U.S.C. chapter 6) does
not apply. Pursuant to section 7805(f) of
the Code, this notice of proposed
rulemaking has been submitted to the
Chief Counsel for Advocacy of the Small
Business Administration for comment
on its impact on small business.
Comments and Requests for Public
Hearing
Before these proposed regulations are
adopted as final regulations,
consideration will be given to any
comments that are submitted timely to
the IRS as prescribed in the preamble
under the ADDRESSES section. The
Treasury Department and the IRS
request comments on all aspects of these
proposed regulations. All comments
submitted will be made available at
www.regulations.gov or upon request. A
public hearing may be scheduled if
requested in writing by any person that
timely submits written comments. If a
public hearing is scheduled, notice of
the date, time, and place for the hearing
will be published in the Federal
Register.
Drafting Information
The principal author of these
proposed regulations is Eliezer Mishory
of the Office of the Associate Chief
Counsel (Procedure and
Administration).
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List of Subjects
26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
26 CFR Part 31
Employment taxes, Income taxes,
Penalties, Pensions, Railroad
Retirement, Reporting and
recordkeeping requirements, Social
Security, Unemployment compensation.
26 CFR Part 301
Employment taxes, Estate taxes,
Excise taxes, Gift taxes, Income taxes,
Penalties, Reporting and recordkeeping
requirements.
Proposed Amendments to the
Regulations
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1continues to read in part as
follows:
■
Authority: 26 U.S.C. 7805, unless
otherwise noted.
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Par. 2. Section 1.6052–2 is amended
by:
■ 1. Revising paragraph (a).
■ 2. Removing paragraph (b).
■ 3. Redesignating paragraph (e) as new
paragraph (b).
■ 4. Revising paragraphs (c) and (d).
■ 5. Removing paragraphs (f) and (g).
The revisions read as follows:
■
§ 1.6052–2 Statements to be furnished
employees with respect to wages paid in
the form of group-term life insurance.
(a) Requirement. Every employer
filing a return under section 6052(a) and
§ 1.6052–1, with respect to group-term
life insurance on the life of an
employee, shall furnish to the employee
whose name is set forth in such return
the tax return copy and the employee’s
copy of Form W–2. Each copy of Form
W–2 must show the information
required to be shown on the Form
W–2 filed under § 1.6052–1. An
employer may truncate an employee’s
social security number to appear in the
form of an IRS truncated taxpayer
identification number (TTIN) on copies
of Form W–2 furnished to the employee.
For provisions relating to the use of
TTINs, see § 301.6109–4 of this chapter
(Procedure and Administration
Regulations). The rules in § 31.6051–1
of this chapter (Employment Taxes and
Collection of Income Tax at Source
Regulations) shall apply with respect to
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the means and time (including
extensions thereof) for furnishing the
employee’s copy of Form W–2 required
by this section to the employee and
making corrections to such form.
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(c) Penalty. For provisions relating to
the penalty provided for failure to
furnish a statement under this section,
see section 6722 and the regulations
thereunder.
(d) Applicability date. This section is
applicable for statements required to be
furnished under section 6052 after
December 31, 2018.
PART 31—EMPLOYMENT TAXES AND
COLLECTION OF INCOME TAX AT
SOURCE
Par. 3. The authority citation for part
31 is amended by adding an entry in
numerical order to read in part as
follows:
■
Accordingly, 26 CFR parts 1, 31 and
301 are proposed to be amended as
follows:
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Authority: 26 U.S.C. 7805 * * *
Section 31.6051–3 also issued under 26
U.S.C. 6051.
*
*
*
*
*
Par. 4. Section 31.6051–1 is amended
by:
■ 1. Revising paragraphs (a)(1)(i)(b) and
(b)(1)(ii).
■ 2. Removing paragraph (d)(1)(ii)(C).
■ 3. Revising paragraphs (f), (h)(2), and
(i).
■ 4. Removing paragraph (j)(8).
■ 5. Adding paragraph (k).
The revisions and addition read as
follows:
■
§ 31.6051–1
Statements for employees.
(a) * * *
(1) * * *
(i) * * *
(b) The name, address, and social
security number of the employee, which
may be truncated to appear in the form
of an IRS truncated taxpayer
identification number (TTIN) on copies
of Forms W–2 that are furnished to the
employee (for provisions relating to the
use of TTINs, see § 301.6109–4 of this
chapter (Procedure and Administration
Regulations)), if wages as defined in
section 3121(a) have been paid or if the
Form W–2 is required to be furnished to
the employee,
*
*
*
*
*
(b) * * *
(1) * * *
(ii) The name, address, and social
security number of the employee, which
may be truncated to appear in the form
of an IRS truncated taxpayer
identification number (TTIN) on copies
of Forms W–2 that are furnished to the
employee (for provisions relating to the
use of TTINs, see § 301.6109–4 of this
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chapter (Procedure and Administration
Regulations)),
*
*
*
*
*
(f) Statements with respect to
compensation, as defined in the
Railroad Retirement Tax Act—(1)
Notification of possible credit or refund.
With respect to compensation (as
defined in section 3231(e)), every
employer (as defined in section 3231(a))
who is required to deduct and withhold
from an employee (as defined in section
3231(b)) a tax under section 3201, shall
include on or with the statement
required to be furnished to such
employee under section 6051(a), a
notice concerning the provisions of this
title with respect to the allowance of a
credit or refund of the tax on wages
imposed by section 3101(b) and the tax
on compensation imposed by section
3201 or 3211 which is treated as a tax
on wages imposed by section 3101(b).
(2) Information to be supplied to
employees upon request. With respect to
compensation (as defined in section
3231 (e)), every employer (as defined in
section 3231(a)) who is required to
deduct and withhold tax under section
3201 from an employee (as defined in
section 3231(b)) who has also received
wages during such year subject to the
tax imposed by section 3101(b), shall
upon request of such employee furnish
to him or her a written statement
showing—
(i) The total amount of compensation
with respect to which the tax imposed
by section 3101(b) was deducted;
(ii) The total amount of employee tax
under section 3201 deducted and
withheld (increased by any adjustment
in the calendar year for overcollection,
or decreased by any adjustment in such
year for undercollection, of such tax
during any prior year); and
(iii) The proportion thereof (expressed
either as a dollar amount, or a
percentage of the total amount of
compensation as defined in section
3231(e), or as a percentage of the total
amount of employee tax under section
3201) withheld as tax under section
3201 for financing the cost of hospital
insurance benefits.
(h) * * *
(2) Time for furnishing statement. The
statement required by this paragraph (h)
for a calendar year shall be furnished—
(i) In the case of an employee who is
required to be furnished a Form W–2,
Wage and Tax Statement, for the
calendar year, within one week of
(before or after) the date that the
employee is furnished a timely Form
W–2 for the calendar year (or, if a Form
W–2 is not so furnished, on or before
the date by which it is required to be
furnished); and
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17:23 Sep 19, 2017
Jkt 241001
(ii) In the case of an employee who is
not required to be furnished a Form W–
2 for the calendar year, on or before
February 7 of the year succeeding the
calendar year.
*
*
*
*
*
(i) Cross references. For provisions
relating to the penalties provided for the
willful furnishing of a false or
fraudulent statement, or for the willful
failure to furnish a statement, see
§ 31.6674–1 and section 7204. For
additional provisions relating to the
inclusion of identification numbers and
account numbers in statements on Form
W–2, see §§ 31.6109–1 and 31.6109–4.
For the penalties applicable to
information returns and payee
statements, see sections 6721–6724 and
the regulations thereunder.
*
*
*
*
*
(k) Applicability date. This section is
applicable for statements required to be
furnished under section 6051 after
December 31, 2018.
■ Par. 5. Section 31.6051–2 is amended
by revising paragraphs (a) and (c) and
adding paragraph (d) to read as follows:
§ 31.6051–2 Information returns on Form
W–3 and Social Security Administration
copies of Forms W–2.
(a) In general. Every employer who is
required to make a return of tax under
§ 31.6011(a)–1 (relating to returns under
the Federal Insurance Contributions
Act), § 31.6011(a)–4 (relating to returns
of income tax withheld from wages), or
§ 31.6011(a)–5 (relating to monthly
returns) for a calendar year or any
period therein, shall file the Social
Security Administration copy of each
Form W–2 required under § 31.6051–1
to be furnished by the employer with
respect to wages paid during the
calendar year. An employer may not
truncate an employee’s social security
number to appear in the form of an IRS
truncated taxpayer identification
number (TTIN) on copies of Form W–2
filed with the Social Security
Administration. Each Form W–2 and the
transmittal Form W–3 shall together
constitute an information return to be
filed with the Social Security
Administration as indicated on the
instructions to such forms. For the
requirement to submit the information
on Form W–2 on magnetic media, see
section 6011(e) and § 301.6011–2 of this
chapter (Procedure and Administration
Regulations).
*
*
*
*
*
(c) Cross references. For provisions
relating to the time for filing the
information returns required by this
section and to extensions of the time for
filing, see sections 6071 and 6081 and
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Frm 00015
Fmt 4702
Sfmt 4702
the regulations thereunder. For the
penalties applicable to information
returns and payee statements, see
sections 6721 through 6724 and the
regulations thereunder.
(d) Applicability date. This section is
applicable for statements required to be
filed under section 6051 after December
31, 2018.
■ Par. 6. Section 31.6051–3 is amended
by revising paragraphs (a)(1)(i), (b)(1),
(e)(3), and (f) and removing paragraph
(g) to read as follows:
§ 31.6051–3 Statements required in case of
sick pay paid by third parties.
(a) * * *
(1) * * *
(i) The name and, if there is
withholding from sick pay under
section 3402(o) and the regulations
thereunder, the social security account
number of the payee (the payee’s social
security number may not be truncated to
appear in the form of an IRS truncated
taxpayer identification number (TTIN)),
(b) * * *
(1) All of the information required to
be furnished under paragraph (a) of this
section, but the employer may truncate
the payee’s social security number to
appear in the form of an IRS truncated
taxpayer identification number (TTIN)
on copies of Forms W–2 that are
furnished to the payee (for provisions
relating to the use of TTINs, see
§ 301.6109–4 of this chapter (Procedure
and Administration Regulations)),
*
*
*
*
*
(e) * * *
(3) The provisions of section 6109
(relating to identifying numbers) and the
regulations thereunder shall be
applicable to Form W–2 and to any
payee of sick pay to whom a statement
on Form W–2 is required by this section
to be furnished. The employer must
include the social security number of
the payee on all copies of Forms W–2.
The employer may truncate the payee’s
social security number to appear in the
form of an IRS truncated taxpayer
identification number (TTIN) on copies
of Forms W–2 that are furnished to the
payee. For provisions relating to the use
of truncated taxpayer identification
numbers (TTINs), see § 301.6109–4 of
this chapter (Procedure and
Administration Regulations).
(f) Applicability date. This section is
applicable for statements required to be
furnished under section 6051 after
December 31, 2018.
PART 301—PROCEDURE AND
ADMINISTRATION
Par. 7. The authority citation for part
301 continues to read in part as follows:
■
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Authority: 26 U.S.C. 7805 * * *
Par. 8. Section 301.6109–4 is
amended by revising paragraphs
(b)(2)(ii) and (iii), (b)(3), and (c) to read
as follows:
■
§ 301.6109–4 IRS truncated taxpayer
identification numbers.
*
*
*
*
(b) * * *
(2) * * *
(ii) A TTIN may not be used on a
statement or document if a statute,
regulation, other guidance published in
the Internal Revenue Bulletin, form, or
instructions, specifically requires use of
a SSN, ITIN, ATIN, or EIN and does not
specifically state that the taxpayer
identifying number may be truncated.
For example, a TTIN may not be used
on a Form W–8ECI or Form W–8IMY
because the forms and/or form
instructions specifically prescribe use of
an SSN, EIN, or ITIN for the U.S.
taxpayer identification number.
(iii) A TTIN may not be used on any
return, statement, or other document
that is required to be filed with or
furnished to the Internal Revenue
Service or the Social Security
Administration in the case of forms
required to be filed with the Social
Security Administration under the
internal revenue laws.
*
*
*
*
*
(3) Examples. The provisions of this
paragraph (b) are illustrated by the
following examples:
sradovich on DSKBBY8HB2PROD with PROPOSALS
*
(i) Example 1. Pursuant to section 6051(d)
and § 31.6051–2(a) of this chapter, Employer
files the Social Security Administration copy
of Employee’s Form W–2, Wage and Tax
Statement, with the Social Security
Administration. Employer may not truncate
any identifying number on the Social
Security Administration copy. Pursuant to
section 6051(a) and § 31.6051–1(a)(1)(i) of
this chapter, Employer furnishes copies of
Form W–2 to Employee. There are no
applicable statutes, regulations, other
published guidance, forms, or instructions
that prohibit use of a TTIN on Form W–2,
and § 31.6051–1(a)(1)(i) specifically permits
truncating employees’ SSNs. Accordingly,
Employer may truncate Employee’s SSN to
appear in the form of a TTIN on copies of
Form W–2 furnished to Employee. Employer
may not truncate its own EIN on copies of
Form W–2 furnished to Employee.
(ii) Example 2. On April 5, year 1, Donor
contributes a used car with a blue book value
of $1100 to Charitable Organization. On April
20, year 1, Charitable Organization sends
Donor copies B and C of the Form 1098–C
as a contemporaneous written
acknowledgement of the $1100 contribution
as required by section 170(f)(12). In lateFebruary, year 2, Charitable Organization
prepares and files copy A of Form 1098–C
with the IRS, reporting Donor’s donation of
a qualified vehicle in year 1. Charitable
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17:23 Sep 19, 2017
Jkt 241001
Organization may truncate Donor’s SSN to
appear in the form of a TTIN in the Donor’s
Identification Number box on copies B and
C of the Form 1098–C because copies B and
C of the Form 1098–C are documents
required by the Internal Revenue Code and
regulations to be furnished to another person;
there are no applicable statutes, regulations,
other published guidance, forms or
instructions that prohibit the use of a TTIN
on those copies; and there are no applicable
statutes, regulations, other published
guidance, forms, or instructions that
specifically require use of an SSN or other
identifying number on those copies.
Charitable Organization may not truncate its
own EIN on copies B and C of the Form
1098–C because a person cannot truncate its
own taxpayer identifying number on any
statement or other document the person
furnishes to another person. Charitable
Organization may not truncate any
identifying number on copy A of the Form
1098–C because copy A is required to be filed
with the IRS.
(c) Applicability date. This section is
applicable to returns, statements and
other documents required to be filed or
furnished after December 31, 2018.
Kirsten Wielobob,
Deputy Commissioner for Services and
Enforcement.
[FR Doc. 2017–19910 Filed 9–18–17; 11:15 am]
BILLING CODE 4830–01–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R07–OAR–2017–0208; FRL–9967–92–
Region 7]
Approval of Implementation Plans;
State of Iowa; Elements of the
Infrastructure SIP Requirements for
the 2010 Nitrogen Dioxide National
Ambient Air Quality Standard (NAAQS)
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
The Environmental Protection
Agency (EPA) is proposing to approve
elements of a State Implementation Plan
(SIP) submission, and an amended SIP
submission from the State of Iowa for
the 2010 Nitrogen Dioxide (NO2)
National Ambient Air Quality Standard
(NAAQS). Infrastructure SIPs address
the applicable requirements of Clean Air
Act (CAA) section 110, which requires
that each state adopt and submit a SIP
for the implementation, maintenance,
and enforcement of each new or revised
NAAQS promulgated by the EPA. These
SIPs are commonly referred to as
‘‘infrastructure’’ SIPs. The infrastructure
requirements are designed to ensure that
SUMMARY:
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Fmt 4702
Sfmt 4702
43925
the structural components of each
state’s air quality management program
are adequate to meet the state’s
responsibilities under the CAA.
In the ‘‘Rules and Regulations’’
section of this Federal Register, we are
approving the state’s SIP revisions as a
direct final rule without a prior
proposed rule. If we receive no adverse
comment, we will not take further
action on this proposed rule.
DATES: Comments must be received on
or before October 20, 2017.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R07–
OAR–2017–0208, to https://
www.regulations.gov. Follow the online
instructions for submitting comments.
Once submitted, comments cannot be
edited or removed from Regulations.gov.
The EPA may publish any comment
received to its public docket. Do not
submit electronically any information
you consider to be Confidential
Business Information (CBI) or other
information whose disclosure is
restricted by statute. Multimedia
submissions (audio, video, etc.) must be
accompanied by a written comment.
The written comment is considered the
official comment and should include
discussion of all points you wish to
make. The EPA will generally not
consider comments or comment
contents located outside of the primary
submission (i.e. on the web, cloud, or
other file sharing system). For
additional submission methods, the full
EPA public comment policy,
information about CBI or multimedia
submissions, and general guidance on
making effective comments, please visit
https://www2.epa.gov/dockets/
commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT:
Heather Hamilton, Air Planning and
Development Branch, U.S.
Environmental Protection Agency,
Region 7, 11201 Renner Boulevard,
Lenexa, KS 66219 at (913) 551–7039, or
by email at hamilton.heather@epa.gov.
SUPPLEMENTARY INFORMATION: This
document proposes to take direct final
action on Iowa’s infrastructure SIP
submissions for the 2010 NO2 NAAQS.
We have published a direct final rule
approving the State’s SIP revision(s) in
the ‘‘Rules and Regulations’’ section of
this Federal Register, because we view
this as a noncontroversial action and
anticipate no relevant adverse comment.
We have explained our reasons for this
action in the preamble to the direct final
rule. A detailed Technical Support
Document (TSD) is included in this
rulemaking docket to address the
following: A description of Clean Air
Act section 110(a)(1) and (2)
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]]>Agencies
[Federal Register Volume 82, Number 181 (Wednesday, September 20, 2017)]
[Proposed Rules]
[Pages 43920-43925]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19910]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1, 31, and 301
[REG-105004-16]
RIN 1545-BN35
Use of Truncated Taxpayer Identification Numbers on Forms W-2,
Wage and Tax Statement, Furnished to Employees
AGENCY: Internal Revenue Service (IRS), Treasury.
[[Page 43921]]
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document contains proposed amendments to the regulations
under sections 6051 and 6052 of the Internal Revenue Code (Code). To
aid employers' efforts to protect employees from identity theft, these
proposed regulations would amend existing regulations to permit
employers to voluntarily truncate employees' social security numbers
(SSNs) on copies of Forms W-2, Wage and Tax Statement, that are
furnished to employees so that the truncated SSNs appear in the form of
IRS truncated taxpayer identification numbers (TTINs). These proposed
regulations also would amend the regulations under section 6109 to
clarify the application of the truncation rules to Forms W-2 and to add
an example illustrating the application of these rules. Additionally,
these proposed amendments would delete obsolete provisions and update
cross references in the regulations under sections 6051 and 6052. These
proposed regulations affect employers who are required to furnish Forms
W-2 and employees who receive Forms W-2.
DATES: Written or electronic comments and requests for a public hearing
must be received by December 18, 2017.
ADDRESSES: Send submissions to: CC:PA:LPD:PR (REG-105004-16), Room
5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand-delivered between the
hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-105004-16), Courier's
Desk, Internal Revenue Service, 1111 Constitution Avenue NW.,
Washington, DC, or sent via the Federal eRulemaking Portal at
www.regulations.gov (REG-105004-16).
FOR FURTHER INFORMATION CONTACT: Concerning these proposed regulations,
Eliezer Mishory, (202) 317-6844; concerning submissions of comments
and/or requests for a hearing, Regina Johnson, (202) 317-6901 (not
toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
This document contains proposed amendments to the Income Tax
Regulations (26 CFR part 1), the Employment Taxes and Collection of
Income Tax at Source Regulations (26 CFR part 31), and the Procedure
and Administration Regulations (26 CFR part 301) regarding statements
that are required to be furnished to employees by employers or other
persons under sections 6051 and 6052 of the Code. Section 6051(a)
generally requires that an employer provide to each employee on or
before January 31st of the succeeding year a written statement that
shows the employee's total amount of wages and the total amount
deducted and withheld as tax from those wages, along with other
information, for each calendar year. Employers must use Form W-2 (or a
substitute statement that complies with applicable revenue procedures
relating to such statements) to provide the information required by
section 6051(a) to employees. See Sec. 31.6051-1(a)(1)(i); Rev. Proc.
2016-54, 2016-45 I.R.B. 685, also published as Publication 1141,
``General Rules and Specifications for Substitute Forms W-2 and W-3,''
or any successor guidance. Section 6051(d) provides that, when required
to do so by regulations, employers must file with the Secretary
duplicates of the forms required to be furnished to employees under
section 6051. Section 31.6051-2(a) generally requires employers to file
Social Security Administration copies of Forms W-2 with the Social
Security Administration. A person making a payment of third-party sick
pay to an employee of another employer (payee) is required under
section 6051(f)(1) to furnish a written statement to the employer for
whom services are normally rendered containing certain information,
including the payee's SSN. Under certain conditions, the employer for
whom services are normally rendered is required under section
6051(f)(2) to furnish a Form W-2 to the payee. This situation may
arise, for example, when an insurance company is making payments to an
employee of another employer because the employee is temporarily absent
from work due to injury, sickness or disability, and the insurance
company has satisfied the necessary requirements under Sec. 32.1(e) of
the Temporary Employment Tax Regulations under the Act of December 29,
1981 (Pub. L. 97-123) to transfer the obligation to do Form W-2
reporting to the employer. Employers also must use Form W-2 to file and
furnish information regarding payment of wages in the form of group-
term life insurance under section 6052.
Section 6109(a) authorizes the Secretary to prescribe regulations
with respect to the inclusion in returns, statements, or other
documents of an identifying number as may be prescribed for securing
proper identification of a person. On July 15, 2014, the Treasury
Department and the IRS published in the Federal Register (79 FR 41127-
02) final regulations (TD 9675) authorizing the use of TTINs on certain
payee statements and certain other documents. These final regulations
were in response to concerns about the risks of identity theft,
including its effect on tax administration.
Section 301.6109-4(b) generally provides that a TTIN may be used to
identify any person on any statement or other document that the
internal revenue laws require to be furnished to another person. Under
Sec. 301.6109-4(a), a TTIN is an individual's SSN, IRS individual
taxpayer identification number (ITIN), IRS adoption taxpayer
identification number (ATIN), or IRS employer identification number
(EIN) in which the first five digits of the nine-digit number are
replaced with Xs or asterisks. For example, a TTIN replacing an SSN
appears in the form XXX-XX-1234 or ***-**-1234. Section 301.6109-
4(b)(2)(ii) prohibits using TTINs if, among other things, a statute,
regulation, other guidance published in the Internal Revenue Bulletin,
form, or instructions specifically requires the use of an SSN.
Additionally, Sec. 301.6109-4(b)(2)(iii) prohibits the use of TTINs on
any return, statement, or other document that is required to be filed
with or furnished to the IRS.
Prior to being amended by the Protecting Americans from Tax Hikes
(PATH) Act of 2015, Public Law 114-113, div. Q, title IV, 129 Stat.
2242, section 6051(a)(2) specifically required employers to include
their employees' SSNs on copies of Forms W-2 that are furnished to
employees. In addition, current regulations under Sec. 31.6051-1, as
well as forms and instructions, require employers to include their
employees' SSNs on copies of Forms W-2 that are furnished to employees.
Section 409 of the PATH Act amended section 6051(a)(2) by striking
``his social security account number'' from the list of information
required on Form W-2 and inserting ``an identifying number for the
employee'' instead. This statutory amendment is effective for
statements issued after December 18, 2015, the date that the PATH Act
was signed into law. Because an SSN is no longer required by section
6051, the Treasury Department and the IRS propose amending the
regulations to permit employers to truncate employees' SSNs to appear
in the form of TTINs on copies of Forms W-2 that are furnished to
employees. If the proposed regulations are finalized without change,
the IRS intends to incorporate the revised regulations into forms and
instructions, permitting employers to use a TTIN on the employee copy
of the Form W-2. See Sec. 301.6109-4(b)(2)(i) and (ii).
[[Page 43922]]
Explanation of Provisions
Truncated SSN Permitted on Employee's Copies of Form W-2
These proposed regulations amend Sec. 31.6051-1 to permit
employers to truncate employees' SSNs to appear in the form of a TTIN
on copies of Forms W-2 that are furnished to employees under section
6051. Consistent with the rule in Sec. 301.6109-4(b)(2)(iii),
prohibiting the use of TTINs on any return, statement, or other
document that is required to be filed with or furnished to the IRS,
these proposed regulations amend Sec. 31.6051-2 to clarify that
employers may not truncate an employee's SSN to appear in the form of a
TTIN on a copy of a Form W-2 that is filed with the Social Security
Administration. This result is appropriate because both the IRS and the
SSA need to utilize Forms W-2 to properly identify individuals to be
able to carry out their respective duties.
Consistent with the rule in Sec. 301.6109-4(b)(2)(ii) that
prohibits using TTINs if, among other things, a statute specifically
requires the use of an SSN, the proposed regulations also amend Sec.
31.6051-3 to clarify that a payee's SSN may not be truncated to appear
in the form of a TTIN on a statement furnished to the employer of the
payee who received sick pay from a third party because section
6051(f)(1)(A)(i) specifically requires such a statement to contain the
employee's SSN. Nonetheless, these proposed regulations permit
employers to truncate payees' SSNs to appear in the form of TTINs on
copies of Forms W-2 that are furnished under section 6051(f)(2) to
payees that report such third-party sick pay, in accordance with the
general rule governing the reporting of wages to employees on Forms W-2
under section 6051(a), because section 6051(f)(2) does not specifically
require the use of an SSN.
Further, these proposed regulations amend Sec. 1.6052-2 to permit
employers to truncate employees' SSNs to appear in the form of TTINs on
copies of Forms W-2 that are furnished to employees under section
6052(b) regarding payment of wages in the form of group-term life
insurance.
These proposed regulations amend Sec. 301.6109-4 to clarify that
truncation is not allowed on any return, statement, or other document
that is required to be filed with or furnished to the Social Security
Administration under the internal revenue laws. These proposed
regulations also clarify the rule prohibiting truncation if a statute,
regulation, other guidance published in the Internal Revenue Bulletin,
form, or instructions, specifically requires use of a SSN, ITIN, ATIN,
or EIN. The proposed regulations provide that truncation is allowed if
a statute or IRS guidance (e.g., regulations, forms, instructions),
that specifically requires use of a SSN, ITIN, ATIN, or EIN, also
specifically states that the taxpayer identifying number may be
truncated. These proposed regulations also add an example illustrating
the application of these rules to Forms W-2. These proposed regulations
also amend the existing example for clarity.
Miscellaneous Updates to Regulations Under Sections 6051 and 6052
In addition to the amendments relating to the truncation of
employees' SSNs to appear in the form of TTINs in specific
circumstances, these proposed regulations eliminate obsolete provisions
and update cross references in the regulations under sections 6051 and
6052, as explained below.
First, these proposed regulations amend Sec. 31.6051-1 to remove
obsolete provisions regarding compensation, as defined in the Railroad
Retirement Tax Act, paid during 1968, 1969, 1970, and 1971 and reported
on the now obsolete Form W-2 (RR); the special rule for statements with
respect to the refundable earned income credit for Form W-2 for 1987
and 1988; and references to the annual contribution base (repealed in
1993) for wages subject to the Hospital Insurance tax (commonly known
as Medicare tax).
Second, these proposed regulations amend Sec. 31.6051-1 to remove
obsolete cross references, including a cross reference to former Sec.
301.6676-1 relating to the penalty for failure to report an
identification number or an account number, and a cross reference to
section 6723 (prior to its amendment in 1989) that was relevant for
Forms W-2 that were due from the beginning of 1987 through the end of
1989.
Third, these proposed regulations amend Sec. 31.6051-2 to update
now inaccurate cross references resulting from statutory and regulatory
changes regarding penalties for failures to file, and to remove a cross
reference to section 6723 (prior to its amendment in 1989) that was
relevant for Forms W-2 that were due from the beginning of 1987 through
the end of 1989. These proposed regulations also change the title of
Sec. 31.6051-2 from ``Information returns on Form W-3 and Internal
Revenue Service copies of Forms W-2'' to ``Information returns on Form
W-3 and Social Security Administration copies of Forms W-2,'' to
conform with the text of the regulation that refers to the Social
Security Administration copies of Form W-2. In addition, these proposed
regulations remove obsolete references in Sec. 31.6051-2 to the
requirements to submit information on magnetic tape and insert a
reference to the requirements to submit information on magnetic media.
Fourth, these proposed regulations amend Sec. 31.6051-3 to remove
the obsolete transition rule for third-party sick pay that was paid to
a payee after December 31, 1980, and before May 1, 1981.
Fifth, these proposed regulations amend Sec. 1.6052-2 to remove an
obsolete rule that allowed employers to use a statement other than a
Form W-2 to satisfy the requirement to furnish a statement to an
employee with respect to wages paid in the form of group-term life
insurance. This rule was relevant for years prior to 1973, before Sec.
1.6052-1 was amended to require employers to report wages in the form
of group-term life insurance on Form W-2. At the same time, to conform
to this new requirement, Sec. 1.6052-2 was amended to provide that the
requirement to furnish a statement to an employee with respect to wages
paid in the form of group-term life insurance may be satisfied by
furnishing to the employee the employee's copy of Form W-2 that was
filed pursuant to Sec. 1.6052-1. Because the transition period to
require employers to file Form W-2 has long since passed and because
the Treasury Department and the IRS understand that copies of Forms W-2
are used to satisfy the requirement to furnish statements to employees
under Sec. 1.6052-2, these proposed regulations require employers to
furnish to employees the employees' copies of Forms W-2 that were filed
pursuant to Sec. 1.6052-1, and these proposed regulations make
conforming changes throughout that section.
Finally, these proposed regulations update the now inaccurate cross
reference resulting from statutory changes regarding penalties for
failures to furnish statements under section 6052 and remove the deemed
compliance rule, which applied only to years before 1972.
Proposed Effective/Applicability Date
These proposed regulations will be effective on the date of the
publication of the Treasury Decision adopting these rules as final in
the Federal Register. These proposed regulations amend the effective/
applicability date provisions in Sec. 31.6051-1, Sec. 31.6051-3, and
Sec. 301.6109-4, and add applicability date provisions to Sec.
1.6052-2 and Sec. 31.6051-2. Several state tax administrators have
requested additional time to develop systems to process the copies of
Forms
[[Page 43923]]
W-2 filed with state income tax returns that may contain truncated
SSNs. In light of this request, these proposed regulations will not
apply to Forms W-2 required to be furnished before January 1, 2019.
Accordingly, these proposed regulations provide that these regulations,
as amended, will be applicable for statements required to be filed and
furnished under sections 6051 and 6052 after December 31, 2018.
Statement of Availability of IRS Documents
IRS Revenue Procedures, Revenue Rulings notices, and other guidance
cited in this preamble are published in the Internal Revenue Bulletin
(or Cumulative Bulletin) and are available from the Superintendent of
Documents, U.S. Government Printing Office, Washington, DC 20402, or by
visiting the IRS Web site at www.irs.gov.
Special Analyses
Certain IRS regulations, including this one, are exempt from the
requirements of Executive Order 12866, as supplemented and reaffirmed
by Executive Order 13563. Therefore, a regulatory assessment is not
required. Because these proposed regulations do not impose a collection
of information on small entities, the Regulatory Flexibility Act (5
U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the
Code, this notice of proposed rulemaking has been submitted to the
Chief Counsel for Advocacy of the Small Business Administration for
comment on its impact on small business.
Comments and Requests for Public Hearing
Before these proposed regulations are adopted as final regulations,
consideration will be given to any comments that are submitted timely
to the IRS as prescribed in the preamble under the ADDRESSES section.
The Treasury Department and the IRS request comments on all aspects of
these proposed regulations. All comments submitted will be made
available at www.regulations.gov or upon request. A public hearing may
be scheduled if requested in writing by any person that timely submits
written comments. If a public hearing is scheduled, notice of the date,
time, and place for the hearing will be published in the Federal
Register.
Drafting Information
The principal author of these proposed regulations is Eliezer
Mishory of the Office of the Associate Chief Counsel (Procedure and
Administration).
List of Subjects
26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
26 CFR Part 31
Employment taxes, Income taxes, Penalties, Pensions, Railroad
Retirement, Reporting and recordkeeping requirements, Social Security,
Unemployment compensation.
26 CFR Part 301
Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income
taxes, Penalties, Reporting and recordkeeping requirements.
Proposed Amendments to the Regulations
Accordingly, 26 CFR parts 1, 31 and 301 are proposed to be amended
as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1continues to read in part
as follows:
Authority: 26 U.S.C. 7805, unless otherwise noted.
* * * * *
0
Par. 2. Section 1.6052-2 is amended by:
0
1. Revising paragraph (a).
0
2. Removing paragraph (b).
0
3. Redesignating paragraph (e) as new paragraph (b).
0
4. Revising paragraphs (c) and (d).
0
5. Removing paragraphs (f) and (g).
The revisions read as follows:
Sec. 1.6052-2 Statements to be furnished employees with respect to
wages paid in the form of group-term life insurance.
(a) Requirement. Every employer filing a return under section
6052(a) and Sec. 1.6052-1, with respect to group-term life insurance
on the life of an employee, shall furnish to the employee whose name is
set forth in such return the tax return copy and the employee's copy of
Form W-2. Each copy of Form W-2 must show the information required to
be shown on the Form W-2 filed under Sec. 1.6052-1. An employer may
truncate an employee's social security number to appear in the form of
an IRS truncated taxpayer identification number (TTIN) on copies of
Form W-2 furnished to the employee. For provisions relating to the use
of TTINs, see Sec. 301.6109-4 of this chapter (Procedure and
Administration Regulations). The rules in Sec. 31.6051-1 of this
chapter (Employment Taxes and Collection of Income Tax at Source
Regulations) shall apply with respect to the means and time (including
extensions thereof) for furnishing the employee's copy of Form W-2
required by this section to the employee and making corrections to such
form.
* * * * *
(c) Penalty. For provisions relating to the penalty provided for
failure to furnish a statement under this section, see section 6722 and
the regulations thereunder.
(d) Applicability date. This section is applicable for statements
required to be furnished under section 6052 after December 31, 2018.
PART 31--EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE
0
Par. 3. The authority citation for part 31 is amended by adding an
entry in numerical order to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Section 31.6051-3 also issued under 26 U.S.C. 6051.
* * * * *
0
Par. 4. Section 31.6051-1 is amended by:
0
1. Revising paragraphs (a)(1)(i)(b) and (b)(1)(ii).
0
2. Removing paragraph (d)(1)(ii)(C).
0
3. Revising paragraphs (f), (h)(2), and (i).
0
4. Removing paragraph (j)(8).
0
5. Adding paragraph (k).
The revisions and addition read as follows:
Sec. 31.6051-1 Statements for employees.
(a) * * *
(1) * * *
(i) * * *
(b) The name, address, and social security number of the employee,
which may be truncated to appear in the form of an IRS truncated
taxpayer identification number (TTIN) on copies of Forms W-2 that are
furnished to the employee (for provisions relating to the use of TTINs,
see Sec. 301.6109-4 of this chapter (Procedure and Administration
Regulations)), if wages as defined in section 3121(a) have been paid or
if the Form W-2 is required to be furnished to the employee,
* * * * *
(b) * * *
(1) * * *
(ii) The name, address, and social security number of the employee,
which may be truncated to appear in the form of an IRS truncated
taxpayer identification number (TTIN) on copies of Forms W-2 that are
furnished to the employee (for provisions relating to the use of TTINs,
see Sec. 301.6109-4 of this
[[Page 43924]]
chapter (Procedure and Administration Regulations)),
* * * * *
(f) Statements with respect to compensation, as defined in the
Railroad Retirement Tax Act--(1) Notification of possible credit or
refund. With respect to compensation (as defined in section 3231(e)),
every employer (as defined in section 3231(a)) who is required to
deduct and withhold from an employee (as defined in section 3231(b)) a
tax under section 3201, shall include on or with the statement required
to be furnished to such employee under section 6051(a), a notice
concerning the provisions of this title with respect to the allowance
of a credit or refund of the tax on wages imposed by section 3101(b)
and the tax on compensation imposed by section 3201 or 3211 which is
treated as a tax on wages imposed by section 3101(b).
(2) Information to be supplied to employees upon request. With
respect to compensation (as defined in section 3231 (e)), every
employer (as defined in section 3231(a)) who is required to deduct and
withhold tax under section 3201 from an employee (as defined in section
3231(b)) who has also received wages during such year subject to the
tax imposed by section 3101(b), shall upon request of such employee
furnish to him or her a written statement showing--
(i) The total amount of compensation with respect to which the tax
imposed by section 3101(b) was deducted;
(ii) The total amount of employee tax under section 3201 deducted
and withheld (increased by any adjustment in the calendar year for
overcollection, or decreased by any adjustment in such year for
undercollection, of such tax during any prior year); and
(iii) The proportion thereof (expressed either as a dollar amount,
or a percentage of the total amount of compensation as defined in
section 3231(e), or as a percentage of the total amount of employee tax
under section 3201) withheld as tax under section 3201 for financing
the cost of hospital insurance benefits.
(h) * * *
(2) Time for furnishing statement. The statement required by this
paragraph (h) for a calendar year shall be furnished--
(i) In the case of an employee who is required to be furnished a
Form W-2, Wage and Tax Statement, for the calendar year, within one
week of (before or after) the date that the employee is furnished a
timely Form W-2 for the calendar year (or, if a Form W-2 is not so
furnished, on or before the date by which it is required to be
furnished); and
(ii) In the case of an employee who is not required to be furnished
a Form W-2 for the calendar year, on or before February 7 of the year
succeeding the calendar year.
* * * * *
(i) Cross references. For provisions relating to the penalties
provided for the willful furnishing of a false or fraudulent statement,
or for the willful failure to furnish a statement, see Sec. 31.6674-1
and section 7204. For additional provisions relating to the inclusion
of identification numbers and account numbers in statements on Form W-
2, see Sec. Sec. 31.6109-1 and 31.6109-4. For the penalties applicable
to information returns and payee statements, see sections 6721-6724 and
the regulations thereunder.
* * * * *
(k) Applicability date. This section is applicable for statements
required to be furnished under section 6051 after December 31, 2018.
0
Par. 5. Section 31.6051-2 is amended by revising paragraphs (a) and (c)
and adding paragraph (d) to read as follows:
Sec. 31.6051-2 Information returns on Form W-3 and Social Security
Administration copies of Forms W-2.
(a) In general. Every employer who is required to make a return of
tax under Sec. 31.6011(a)-1 (relating to returns under the Federal
Insurance Contributions Act), Sec. 31.6011(a)-4 (relating to returns
of income tax withheld from wages), or Sec. 31.6011(a)-5 (relating to
monthly returns) for a calendar year or any period therein, shall file
the Social Security Administration copy of each Form W-2 required under
Sec. 31.6051-1 to be furnished by the employer with respect to wages
paid during the calendar year. An employer may not truncate an
employee's social security number to appear in the form of an IRS
truncated taxpayer identification number (TTIN) on copies of Form W-2
filed with the Social Security Administration. Each Form W-2 and the
transmittal Form W-3 shall together constitute an information return to
be filed with the Social Security Administration as indicated on the
instructions to such forms. For the requirement to submit the
information on Form W-2 on magnetic media, see section 6011(e) and
Sec. 301.6011-2 of this chapter (Procedure and Administration
Regulations).
* * * * *
(c) Cross references. For provisions relating to the time for
filing the information returns required by this section and to
extensions of the time for filing, see sections 6071 and 6081 and the
regulations thereunder. For the penalties applicable to information
returns and payee statements, see sections 6721 through 6724 and the
regulations thereunder.
(d) Applicability date. This section is applicable for statements
required to be filed under section 6051 after December 31, 2018.
0
Par. 6. Section 31.6051-3 is amended by revising paragraphs (a)(1)(i),
(b)(1), (e)(3), and (f) and removing paragraph (g) to read as follows:
Sec. 31.6051-3 Statements required in case of sick pay paid by third
parties.
(a) * * *
(1) * * *
(i) The name and, if there is withholding from sick pay under
section 3402(o) and the regulations thereunder, the social security
account number of the payee (the payee's social security number may not
be truncated to appear in the form of an IRS truncated taxpayer
identification number (TTIN)),
(b) * * *
(1) All of the information required to be furnished under paragraph
(a) of this section, but the employer may truncate the payee's social
security number to appear in the form of an IRS truncated taxpayer
identification number (TTIN) on copies of Forms W-2 that are furnished
to the payee (for provisions relating to the use of TTINs, see Sec.
301.6109-4 of this chapter (Procedure and Administration Regulations)),
* * * * *
(e) * * *
(3) The provisions of section 6109 (relating to identifying
numbers) and the regulations thereunder shall be applicable to Form W-2
and to any payee of sick pay to whom a statement on Form W-2 is
required by this section to be furnished. The employer must include the
social security number of the payee on all copies of Forms W-2. The
employer may truncate the payee's social security number to appear in
the form of an IRS truncated taxpayer identification number (TTIN) on
copies of Forms W-2 that are furnished to the payee. For provisions
relating to the use of truncated taxpayer identification numbers
(TTINs), see Sec. 301.6109-4 of this chapter (Procedure and
Administration Regulations).
(f) Applicability date. This section is applicable for statements
required to be furnished under section 6051 after December 31, 2018.
PART 301--PROCEDURE AND ADMINISTRATION
0
Par. 7. The authority citation for part 301 continues to read in part
as follows:
[[Page 43925]]
Authority: 26 U.S.C. 7805 * * *
0
Par. 8. Section 301.6109-4 is amended by revising paragraphs (b)(2)(ii)
and (iii), (b)(3), and (c) to read as follows:
Sec. 301.6109-4 IRS truncated taxpayer identification numbers.
* * * * *
(b) * * *
(2) * * *
(ii) A TTIN may not be used on a statement or document if a
statute, regulation, other guidance published in the Internal Revenue
Bulletin, form, or instructions, specifically requires use of a SSN,
ITIN, ATIN, or EIN and does not specifically state that the taxpayer
identifying number may be truncated. For example, a TTIN may not be
used on a Form W-8ECI or Form W-8IMY because the forms and/or form
instructions specifically prescribe use of an SSN, EIN, or ITIN for the
U.S. taxpayer identification number.
(iii) A TTIN may not be used on any return, statement, or other
document that is required to be filed with or furnished to the Internal
Revenue Service or the Social Security Administration in the case of
forms required to be filed with the Social Security Administration
under the internal revenue laws.
* * * * *
(3) Examples. The provisions of this paragraph (b) are illustrated
by the following examples:
(i) Example 1. Pursuant to section 6051(d) and Sec. 31.6051-
2(a) of this chapter, Employer files the Social Security
Administration copy of Employee's Form W-2, Wage and Tax Statement,
with the Social Security Administration. Employer may not truncate
any identifying number on the Social Security Administration copy.
Pursuant to section 6051(a) and Sec. 31.6051-1(a)(1)(i) of this
chapter, Employer furnishes copies of Form W-2 to Employee. There
are no applicable statutes, regulations, other published guidance,
forms, or instructions that prohibit use of a TTIN on Form W-2, and
Sec. 31.6051-1(a)(1)(i) specifically permits truncating employees'
SSNs. Accordingly, Employer may truncate Employee's SSN to appear in
the form of a TTIN on copies of Form W-2 furnished to Employee.
Employer may not truncate its own EIN on copies of Form W-2
furnished to Employee.
(ii) Example 2. On April 5, year 1, Donor contributes a used car
with a blue book value of $1100 to Charitable Organization. On April
20, year 1, Charitable Organization sends Donor copies B and C of
the Form 1098-C as a contemporaneous written acknowledgement of the
$1100 contribution as required by section 170(f)(12). In late-
February, year 2, Charitable Organization prepares and files copy A
of Form 1098-C with the IRS, reporting Donor's donation of a
qualified vehicle in year 1. Charitable Organization may truncate
Donor's SSN to appear in the form of a TTIN in the Donor's
Identification Number box on copies B and C of the Form 1098-C
because copies B and C of the Form 1098-C are documents required by
the Internal Revenue Code and regulations to be furnished to another
person; there are no applicable statutes, regulations, other
published guidance, forms or instructions that prohibit the use of a
TTIN on those copies; and there are no applicable statutes,
regulations, other published guidance, forms, or instructions that
specifically require use of an SSN or other identifying number on
those copies. Charitable Organization may not truncate its own EIN
on copies B and C of the Form 1098-C because a person cannot
truncate its own taxpayer identifying number on any statement or
other document the person furnishes to another person. Charitable
Organization may not truncate any identifying number on copy A of
the Form 1098-C because copy A is required to be filed with the IRS.
(c) Applicability date. This section is applicable to returns,
statements and other documents required to be filed or furnished after
December 31, 2018.
Kirsten Wielobob,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2017-19910 Filed 9-18-17; 11:15 am]
BILLING CODE 4830-01-P
